The article starts with the recent participation of India in the 32nd special Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG) plenary meeting. This event was conducted under the supervision of the Financial Action Task Force. Agencies such as the National Investigation Agency and various enforcement agencies disclosed information related to terror financing during this virtual conference. The main meeting of the FATF is scheduled to happen on June 24th, 2020.
Eurasian Group (EAG)
The EAG is an organization that includes nine member countries: India, Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, and Belarus. This group is associated with the FATF as an associate member.
Financial Action Task Force (FATF)
Established in 1989 following the G7 Summit in Paris, the FATF is an intergovernmental organization. The FATF primarily aims to establish standards and encourage effective legal, regulatory, and operational measures to combat money laundering and terrorism financing. It also handles threats that can jeopardize the integrity of the global financial system. The headquarters of the FATF, which has a total of thirty-seven jurisdictions as members including India, is located at the Organisation for Economic Cooperation and Development (OECD) in Paris.
FATF’s Two Lists
The FATF maintains two lists – Grey List and Black List. The Grey List comprises countries providing a safe haven for supporting terror funding and money laundering activities. Countries included in this list are issued a warning regarding their potential inclusion in the blacklist. The Black List, on the other hand, consists of Non-Cooperative Countries or Territories (NCCTs) that openly support terror funding and money laundering activities. The FATF updates these lists regularly, adding or removing entries as needed.
FATF Plenary
The FATF Plenary, the decision-making body of the FATF, meets thrice in a year.
FATF’s Perspective on Crime amid Covid-19
The FATF has been actively observing the influence of the pandemic on measures imposed to curb illicit financing. In its paper titled “Covid-19-related Money Laundering and Terrorist Financing Risks and Policy Responses,” the FATF noted an increase in crimes linked to the pandemic, including fraud, cyber-crime, and exploitation of government funds or international finance assistance.
India and FATF
Before the significant meeting on June 24th, India aims to share additional evidence related to narco-terror cases tied to Pakistan-based syndicates with the essential members of the FATF. It has been alleged that these syndicates are funding terrorists operating in Jammu and Kashmir. Multiple investigations regarding this are being carried out by the Enforcement Directorate and the National Investigation Agency.
Status of Pakistan
Pakistan, which is still on the FATF’s “grey list,” was initially given a deadline till June 2020 to comply with a 27-point action plan against terror funding networks and money laundering syndicates, failing which it would face “black listing.” However, due to the Covid-19 pandemic, the deadline has now been extended to October 2020.
